By Michael Aneiro

Citi is out with its latest monthly list of CDS-adjusted dividend-paying stock picks, and this time it’s raised its admissions standards, cutting the number of U.S. stocks that qualify by more than a third since its previous list.

Citi looks for global stocks with a market cap north of $10 billion that combine high dividend yields (at least 1.5 percentage points higher than median-yielding stocks) with solid prospects per the credit-default swaps market. Previously, the list filtered for companies with CDS spreads under 100 basis points (the lower the CDS, the lower the perceived credit risk). This time around, in an era of low borrowing rates, high cash balances and easy access to credit, Citi tightened its CDS criteria “to reflect changes in the market conditions,” and is jettisoning the 100-bps threshold to screen instead for companies with CDS spreads in the lowest third of its coverage universe.

As a result, the March list got chopped to 44 global companies from 69 in February, with a 4.4% average dividend yield (down from 4.7% last month) that Citi forecasts will grow by 6% in 2013 (up from 4% previously) and an average CDS of 49 bps (down from 62). The list remains overweight global defensive stocks and underweight financials.

Amey Stone is Barron’s Income Investing blogger and Current Yield columnist. She was formerly a managing editor at CBS MoneyWatch, MSN Money and AOL DailyFinance. Her responsibilities included overseeing market coverage and personal finance topics. Prior to those roles, she was a senior writer at BusinessWeek where she authored the Street Wise column online and contributed to the magazine’s Inside Wall Street column. Topics covered included economics, corporate finance, Fed policy, municipal bonds, mutual funds and dividend investing. She co-authored King of Capital, a biography of Citigroup Chairman Sandy Weill. She is a graduate of Yale University and Columbia University’s Graduate School of Journalism.